China Sells Billions in US Treasuries as BRICS Nations Move Away from the Dollar
China has sold over $74 billion worth of US Treasuries in the past year, marking a significant shift in global economic dynamics. Additionally, two BRICS nations, Russia and China, have announced a move away from using the US dollar in their mutual trade, opting for their own national currencies instead.
China’s Treasury Holdings Decline
In the latest data released by the Treasury Department, China’s holdings of US Treasuries have dropped from $849 billion to $775 billion between the beginning of Q2 2023 and Q2 2024. This decrease represents the lowest level of Chinese Treasury holdings since 2009.
- China sells more than $74 billion in US Treasuries in the last year.
- China’s Treasuries holdings decline to $775 billion.
- China’s Treasury holdings reach the lowest level since 2009.
BRICS Nations Shift Away from Dollar
Aside from China, other countries have also been reducing their Treasury holdings. India sold $1.4 billion, Brazil unloaded $1.2 billion, and Saudi Arabia shed $0.3 billion in Treasury assets. Meanwhile, Russia’s Minister of Foreign Affairs, Sergei Lavrov, announced that Russia and China have significantly reduced their use of the dollar in bilateral trade.
- Other countries decrease their Treasury holdings.
- India, Brazil, and Saudi Arabia sell off Treasury assets.
- Russia and China move away from using the dollar in mutual trade.
The Decline of the Dollar’s Dominance
Lavrov emphasized that more than 90% of trade settlements between Russia and China are now conducted in their own national currencies, signaling a departure from the traditional reliance on the US dollar for international transactions. This shift highlights the diminishing influence of the US dollar in global commerce.
- Russia and China reduce dollar usage in trade settlements.
- Trade between the two nations conducted in national currencies.
- Diminishing influence of the US dollar in global transactions.
Impact on International Trade Relations
Lavrov’s remarks underscore a growing trend away from US dollar dominance in international trade. He noted that despite pressure from Western countries, the economic cooperation between Russia and China continues to thrive, with trade flows among CIS countries experiencing substantial growth. This shift away from the dollar signifies a broader realignment of global economic relations.
- Shift away from the US dollar in international trade relations.
- Economic cooperation between Russia and China remains strong.
- Growth in trade flows among CIS countries.
Hot Take: The Changing Landscape of Global Finance
As China divests billions of US Treasuries and nations like Russia and China move away from the dollar in their trade relations, the international financial landscape is undergoing a seismic shift. The decline of the dollar’s dominance and the increasing use of national currencies in trade settlements signify a significant transformation in global economic dynamics.
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